Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Bonds (TLT) reversed on 9/17/24, the day before the Fed ‘cut’ and never looked back.
Rates continue to rise.
Meanwhile, real estate (IYR), has been whistling past the graveyard; that is, until now.
Real Estate IYR, Weekly
If the wedge is in-effect and we’re in a throw-over about to return into the pattern, it signals a very bearish condition (not advice, not a recommendation).
Even the illustrious financial press is starting to catch on that something’s not quite right. 🙂
Of course, you have to ‘subscribe’ for information like this.
As for this site, the current (bond) reversal was first identified and discussed, here.
Back then …
“Looking at the Fed calendar, link here, it’s a very interesting date; ‘the day after’ November 5th.
Let’s see if the ‘rate cut’ is immediately reversed (not advice, not a recommendation).”
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
As interest rates rachet higher, the squeeze is being put on operations that are rate dependent; real estate and auto loans to name just two (not advice, not a recommendation).
Tomorrow’s price action in CarMax, is likely to confirm the trend (shown below) or negate.
Note: We could also have a trading channel.
CarMax KMX, Daily
If KMX, is in the channel, we’re at the far-right end of the ‘supply side’.
It’s important to note, price action is also (just) below well-established support at the 73.50-area.
From a technical standpoint, that puts KMX, in Wyckoff ‘spring’ position.
The expectation is for the spring set-up to fail (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
With the reversal now obvious (since the Fed announcement, September 18th), we have the usual suspects putting out ‘content’ (here and here) letting you know what’s already happened.
In Prechter’s book, The Wave Principle of Human Social Behavior, he states, being part of the herd, is hard-wired into the brain.
Therefore, it takes diligent, consistent effort, to go against the mindless (limbic brain) herd if you’re going to make an objective observation.
So, let’s do just that, taking an objective look at the potential effects of the bond reversal.
Bonds (TLT proxy) began its reversal, rates higher, the day before the last Fed announcement.
The IYR, reached its high that Wednesday, 9/18/24.
Real Estate IYR, Weekly
It’s been nearly three years since the all-time high in December, of 2021. The wedge shown below has been just over a year in the making.
The reversal action of the past few weeks can be seen in the ‘Throw-Over’ area of the chart.
If the wedge has been identified correctly, price action has now entered back into that formation.
Positioning
This post highlighted a short position was on the horizon.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
As the chart shows, real estate and bonds (interest rates) have been well correlated for over three years.
There are times, when that correlation gets ‘spread’; one market goes one way, while the other market goes … well, the ‘other’ way.
That time appears to be now.
Long Bonds TLT & Real Estate IYR, Daily Close
Note how the ‘spread’ eventually gets closed.
Note: The first spread on the left part of the chart took several months to close (completed in late July 2023).
The correlation remained near exact until about January 2024, where it began to diverge again.
Now, we’re spread with bonds heading lower (rates higher) helped along with the latest ‘jobs data‘.
Positioning
If time permits, we’ll go into price action posted yesterday and how this series of two IYR, price bars, yesterday, the day before, are (almost) exactly like DE (John Deere) price action shown by Daivd Weis on his video … except taking it from a short perspective.
Current position DRV-24-05, remains intact; stop now moved tentatively to the DRV session low for today (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The (potential) big ruse, interest rates are heading lower. We have the usual suspects, spinning how soon we’ll have the next rate cut.
Well, back at the ranch, home builder Lennar Corp. (LEN), posted massive down-thrust, selling energy this past Friday, after Thursday’s post-market earnings release.
As we’ll see below, force on the move was potentially the second highest ever, in the history of trading for the company (data going back to 10/5/18).
Lennar Corporation LEN, Daily
At this point (11:27 a.m., EST) LEN is having an ‘inside day’, trading within Friday’s price action.
Inside days are typically preparation for another kind of day, an ‘outside’ day 🙂
That’s where the trend is confirmed (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
